Monthly Archives: March 2010

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On Sunday, as will happen every day for two decades, another 10,000 baby boomers became eligible for Social Security and Medicare. And Congress moved closer to piling a huge new middle-class entitlement onto the rickety structure of America’s Ponzi welfare state. Congress has a one-word response to the demographic deluge and the scores of trillions of dollars of unfunded liabilities: “More.”

There will be subsidized health insurance for families of four earning up to $88,200 a year, a ceiling certain to be raised, repeatedly. The accounting legerdemain spun to make this seem affordable — e.g., cuts (to Medicare) and taxes (on high-value insurance plans) that will never happen — is Enronesque.

As America’s teetering tower of unkeepable promises grows, so does the weight of government, in taxes and mandates that limit investments and discourage job creation. America’s dynamism, and hence upward social mobility, will slow, as the economy becomes what the party of government wants it to be — increasingly dependent on government-created demand.

Promoting dependency is the Democratic Party’s vocation. The party knows that almost all entitlements are forever, and those that are not — e.g., the lifetime eligibility for welfare, repealed in 1996 — are not for the middle class. Democrats believe, plausibly, that middle-class entitlements are instantly addictive and, because there is no known detoxification, that class, when facing future choices between trimming entitlements or increasing taxes, will choose the latter. The taxes will disproportionately burden high earners, thereby tightening the noose of society’s dependency on government for investments and job creation.

Eventually, of course, the government will run out of other people’s money. I shudder to think about the wrenching realignment that will be required then.

Mark Steyn sums it up in The Corner, shortly before the measure passed:

Whatever is in the bill is an intermediate stage: As the graph posted earlier [reprinted here] shows, the governmentalization of health care will accelerate, private insurers will no longer be free to be “insurers” in any meaningful sense of that term (ie, evaluators of risk), and once that’s clear we’ll be on the fast track to Obama’s desired destination of single payer as a fait accomplis.

If Barack Obama does nothing else in his term in office, this will make him one of the most consequential presidents in history. It’s a huge transformative event in Americans’ view of themselves and of the role of government. You can say, oh, well, the polls show most people opposed to it, but, if that mattered, the Dems wouldn’t be doing what they’re doing. Their bet is that it can’t be undone, and that over time, as I’ve been saying for years now, governmentalized health care not only changes the relationship of the citizen to the state but the very character of the people. As I wrote in NR recently, there’s plenty of evidence to support that from Britain, Canada and elsewhere.

Regardless of the political fallout, historians say health-care reform will take its place in the same category as the enactment of Social Security in 1935 and Medicare in 1965…

But there is a major difference between this health-care battle and the debates that preceded passage of Social Security and Medicare. Although there was opposition to those measures — conservative opponents called Medicare socialized medicine — in the end they passed with overwhelming, bipartisan majorities.

The House approved the Medicare bill on a vote of 313 to 115, including 65 Republicans — nearly half the GOP caucus at the time. The Senate approved the measure by 68 to 21, including 13 of the 27 Republicans.

Social Security passed the House in 1935 by 372 to 77. On that vote, 77 Republicans joined the majority and 18 Republicans opposed it. In the Senate, the vote was 77 to 6, with five of 19 Republicans in opposition.

In one important way, however, Obamacare will be like Medicare: Financially unsustainable. Businessweek:

The Democrats’ model of a successful government health-care program, Medicare, is going broke. Medicare’s Hospital Insurance Trust Fund is already insolvent on a cash-flow basis and will be exhausted within the next eight years, according to the Social Security and Medicare Boards of Trustees’ 2009 Annual Report.

And that’s before the baby boomers start to retire.

If ObamaCare passes, the outlook isn’t that much different. While the Senate bill has some good features, including the creation of health insurance exchanges where individuals and small businesses can buy coverage, it fails to tackle the basic problem: the lack of incentives. Consumers are divorced from the cost of care. Is there anything else we buy — from big-ticket items like cars and appliances to necessities like food and clothing to discretionary items like sports tickets and air fares — where we don’t comparison price shop or weigh our infinite wants against our more limited resources?

With their fingers in their ears and their voices chorusing “la-la-la-la-la,” the Democrats are on the verge of passing a health care bill opposed by a majority of Americans. They’ll pay for it in November, of course, but the damage will be done. Republicans will bravely talk about repeal, but entitlement programs will end only when the government runs out of other people’s money.

Princeton classmate and über-economist Greg Mankiw cautions that the Congressional Budget Office numbers that Democrats are trumpeting do not withstand scrutiny.

There has been a lot of talk lately about the CBO scoring of the health bill. Here is one thing people should understand about their numbers: When they estimate the budget impact of a bill like this, they assume the path of GDP is unchanged.

Recall that the bill raises taxes substantially. Some of these tax hikes are the explicit tax increases on capital income to pay for the insurance subsidies. Some of these tax hikes are the implicit marginal rate increases from the phase-out of the insurance subsidies as a person’s income rises. Both of these would be expected to reduce GDP growth.

Greg is cogent and instructive as always, but I confess I was intrigued even more by the custom warning label he posted on his blog (shown above). After downloading the JPEG file, on a hunch I Googled its filename, warninglabel.jpg, and sure enough, the top result was a Warning Label Generator with multiple customization options.

It’s disappointing that despite offering more than 40 alternatives, none of the icons have a financial theme. So I settled for a health care theme, at right.

But there is one thing of which I am nearly perfectly certain: If we pass this thing, no American politician, left or right, is going to cut any of these programs, or raise the broad-based taxes necessary to pay for them, without any compensating goodies to offer the public . . . until the crisis is almost upon us. I can think of no situation, other than impending crisis, in which such a thing has been done–and usually, as with Social Security, they have done just little enough to kick the problem down the road. The idea that you pass a program of dubious sustainability because you can always make it sustainable later, seems borderline insane. I can’t think of a single major entitlement that has become more sustainable over time. Why is this one supposed to be different?

All of the spending laid out by CBO yesterday (more than $2.4 trillion in the first decade of the program’s full operation) will certainly happen if the bill is enacted, but many of the offsets are very unlikely to happen. The bill would leave it to another president and Congress, in 2018, to impose a tax on “Cadillac” health-care plans — a tax whose definition of “Cadillac” would grow much more slowly than the cost of coverage, so that more and more people would be covered by it every year. Why should we expect a future Congress and president to make such a politically painful move if the present Congress and president won’t do it? It would also leave it to the next Congress to drastically cut physician pay in Medicare — even as today’s Congress refuses to make much more modest cuts, and so wants to pass a “doc fix” that will cost more than $300 billion. Simply everybody knows this cut won’t happen, and as the CBO (with its customary bureaucratic understatement) has put it: “the long-term budgetary impact could be quite different if key provisions of the bill were ultimately changed or not fully implemented.” This is not fiscal responsibility; it’s not even naïveté or self-delusion. It’s just plain dishonesty.

But [Obama] has been so sucked into the system that now he stands by while House Speaker Nancy Pelosi talks about passing health care via “deem and pass” — a tricky legislative device in which things get passed without members having the honor or the guts to stand up and vote for it.

Deem and pass? Are you kidding me? Is this what the Revolutionary War was fought for? Is this what the boys on Normandy beach were trying to defend? Is this where we thought we would end up when Obama was speaking so beautifully in Iowa or promising to put away childish things?

Props to Tunku Varadarajan, apparently the first to say this maneuver sounds like “demon pass.” It’s what we’ve come to.

Start with the fact that I met the Web Goddess on the web, through an online divorce support group. Add to that the fact that off and on, the Internet has played a key role in my livelihood for well over a decade. And the web continually brings new opportunities and information into my life.

Consider the example of my largest Serbian client — a key partner in my international consulting practice. Actually, technically speaking, she’s my only Serbian client. And if you insist on being picky, she’s my entire international consulting practice.

A few months ago I got an email from Melisa Antic that started like this:

Dear Mr. Petersen,
I have come across your website in what is seeming to be an impossible
task of finding a web content writer and consultant in one person.
I am starting up a small business in Belgrade, Serbia, a mix of a
relocation and concierge agency services for expats in Belgrade, and would
greatly appreciate professional help when it comes to website content
writing and consultancy.

The website Melisa found was lovingly hand-crafted for me by the Web Goddess when I started my home-based writing and consulting business in 2007. It was intended to serve as an online resume and brochure, and to help establish an image of stability and professionalism. It has done all those things very well, although my career has recently taken some different turns.

I never made much effort to drive traffic to the site, but I also thought that just by being out there on the web, the site might bring in an occasional new client. And in fact it did.

One.

From Serbia.

I was skeptical at first. At least it wasn’t from Nigeria, I thought. (Can you imagine trying to run a legitimate business from Nigeria?) I set up a phone call with her (on her dime), and subsequently reviewed some materials she sent me.

Melisa is building a business based on helping English-speaking expats relocate and settle in to living in Belgrade. She named her company Belgrade Assistance, and she already had a logo and a local web designer. Her potential clients primarily work for large multi-national corporations, so she knew she needed sophisticated marketing materials. Melisa speaks fluent English, but it’s not her first language, and she wanted the text to be flawless.

As it happens, I’ve worked with expats quite a bit, and at one point I tried very hard to get myself transferred overseas. I told her I thought I could help her, and asked her for a deposit to begin work. I provided the bank information she requested — after a quick call to Citibank to make sure the information would enable deposits but not withdrawals.

A few days later the deposit landed in my account, and the last wisps of doubt disappeared. I was doing business with a client in Serbia.

We’ve had an excellent collaboration, via phone, email and Facebook. She had a strong sense of the kind of business she wanted to build, but she was receptive to suggestions — not just about text, but about connecting with her market. I suggested that she “give away” some useful specific information about Belgrade on the website, both to establish her expertise and to set up a situation where any client she connects with will feel that the transaction has already begun.

I knew that adapting to a new culture can be a source of high anxiety for expats, especially those who relocate with a spouse and children. She knew that she would be competing with global relocation services that used a cookie-cutter approach in every market where they do business. She loved the slogan I suggested for the business: “Making Belgrade Feel Like Home.”

The site is launched, and it’s visually stunning. The writing is pretty good, too. Melisa has an attractive site to back her up as she does the methodical work of connecting with corporate HR departments and local institutions, building a business, and serving her clients. I have a new city on the list of places I hope to visit someday. If I ever make it there, I know a terrific local resource for advice on what to see and do.

It’s Census time, and there’s a nefarious conservative plot afoot to undermine the gummint by subverting the racial purity of the decennial enumeration. The idea is to answer the racial question by ignoring the familiar black/white/Asian categories, selecting “Other,” and writing in “American.”

So it must be a conservative plot — except the Web Goddess doesn’t see it that way. When I first mentioned the idea to her, she said it appeals to her from a liberal perspective. The twist she suggests is to move back one step further and answer the race question with “Other – human.” There’s a logic to that, but it passes up an opportunity to make a patriotic statement. If some future World Government takes a census, I’ll answer “human” on that one.

Another idea is for anyone who was born and raised in this country to answer “Native American” — but the Census folks seem to have anticipated this. If you look at the form reproduced above, the category is labeled “American Indian or Alaska Native” — there is no Native American box to check.

Congress has directed through a federal law that anyone who “refuses or willfully neglects…to answer, to the best of his knowledge, any of the questions” on the Census form can be fined $100 (13 U.S.C. § 221). If you deliberately give a false answer, you can be fined up to $500. Although there are not a lot of reported prosecutions, this statutory requirement has been upheld by the courts as constitutional.

So the standard I have to meet is answering “to the best of [my] knowledge.” OK, here are some samples of my knowledge:

I know that data on race helps fuel the racial grievance industry. (I do not know of any counterbalancing, non-pernicious use for racial data.)

I know that any moral justification there may once have been for Affirmative Action (and other forms of race-based discrimination) has disappeared with the election of a black president. Equality of opportunity should be the standard, not equality of outcome.

I know the approach the Census takes to racial identity is utterly ridiculous and inconsistent. Start with the question itself, as reproduced above. Note that one of the choices offered under “Other Asian” is “Pakistani.” In the words of Mark Krikorian, who touched off the debate in The Corner:

If “Pakistani” — a political/religious identity invented in 1934 — is a “race,” then “American” is a race.

I know more than 20 million people chose “American” as their race in the 2000 Census — making it the third-ranking choice, after “German” and “African American.” Here’s the data from the U.S. Census’s “Ancestry” page. (Yes, I know that race, ethnicity and ancestry all mean different things, but the Census seems to use the terms interchangeably.) And here’s a more user-friendly version of the Census spreadsheet — I’ve eliminated empty-category noise and sorted by top answers. It turns out that “English” outpolls “Mexican,” although if you lump in “Mexicano” and “Mexican-American,” the Mexicans surge ahead. “Human” doesn’t show up, it must be lumped in with “Not Reported.”

So it turns out that to the best of my knowledge, I’m an American. Who’s with me?

College buddy Tom Streithorst is out with an article in the UK’s Prospect Magazine titled “Why The Hurt Locker shouldn’t have won,” based on Tom’s extensive experience as a journalist embedded with U.S. forces in Iraq. Tom’s thesis is that although some aspects of the movie are outstanding, it is marred by an unrealistic portrayal of the troops.

Three scenes are absolutely wrong. In one, Sergeant James escapes his base and roams Baghdad by himself, lost and confused, looking for an Iraqi he suspects of killing a boy. No, Americans never leave the base by themselves. In the second, the soldiers wander around their base, drunk out of their minds. One of the exceptional features of the Iraq war is it is probably the first war ever fought without alcohol or drugs. And, in the last and worst, our boys have their guns aimed at an Iraqi they suspect to be a car bomber. Despite his repeatedly not obeying their orders to back up, they don’t shoot him, even though they themselves might die.

Tom left out the scene where the one sergeant sucker-punches cowboy Staff Sergeant James — his superior — after the cowboy took off his headphones. And when the sniper team waited hours for a shot at the enemy sniper in the cinderblock pillbox, rather than calling in air support in a setting where there was no danger of civilian casualties. I also thought the Iraqi with the time bomb locked to his body would have been dropped when he disregarded translated orders to stop walking toward the troops.

But while I agree with Tom that the bizarre roaming-around-Baghdad scene is a serious flaw, the rest of it I can chalk up to creative license. After years of reading about tediously polemical anti-war movies set in Iraq — all of them box-office duds — I’m just glad that the first Iraq movie to gain critical acclaim avoids taking cheap political shots. Sergeant James is reckless to the point of pathology, but he’s clearly a Good Guy.

My acid test for the quality of a movie is how much of it I remember later. There are probably 20 scenes in Schindler’s List that I can replay in my mind after seeing the movie once, in 1993. Hurt Locker is a lesser film, but I’ll remember James’s heart-wrenching apologies to the walking Iraqi time bomb he couldn’t save. I also saw Avatar, the other major Best Picture contender, and while it was enjoyable enough, the main thing I remember is fiddling with the 3-D glasses.

Why The Hurt Locker shouldn’t have won

While much of the discussion about health care has focused on the lack of 60 Democratic votes in the Senate, the House may pose an even bigger obstacle. For legislative process geeks, John Podhoretz explains the coming maneuvers. First the House has to pass the Senate bill, with the understanding that there would then be discussions on a second, “reconciliation” bill (normally just used for budget matters) that “fixes what’s wrong with the first bill.”

It appears that, in an effort to make this as easy as possible on the Senate, the House is now under pressure from the Senate and the White House to vote for the reconciliation bill before the Senate. At which point the Senate will take it up and ramrod through the second bill with 51 votes, Obama signs it, and there’s health-care.

This strategy requires the House not only to vote for a wildly unpopular bill once, but then to vote on its sequel almost immediately afterward. In other words, House members are going to be forced to cast two wildly unpopular, highly visible votes in succession, without anybody else taking the heat. And there is going to be deal-making and back-scratching and all manner of sleazy behavior to achieve it, all of which will just increase the public sense of a corrupt process that has ensnared Democrats just as corruption seemed to ensnare Republicans in 2006. All so the Senate can sneak it through. And the House has good reason not to trust that the Senate will hold to its part of the bargain. What if there is a colossal meltdown in public support just before the reconciliation vote? What if the Senate decides to change it a little and throws it all back into chaos again? What if House members were to cast two votes and there was no health care at the end of the process?

…Thus, the best hope of derailing health care will not derive from high motives – stopping this dreadful measure before it becomes law — but rather very low motives — sheer, panicked self-preservation on the part of Democratic pols hoping against hope to hold on in spite of the looming Republican wave.

And remember, the House only had a five-vote margin when it passed its own version of health care “reform” last year.

Disregard all the talk about the process being “broken.” This is checks-and-balances as the Framers intended. It’s supposed to be hard to pass sweeping legislation.

Three hearty cheers for Muhammad Tahir ul-Qadri, a Pakistan-born Muslim scholar in London, who has issued a fatwa declaring that suicide bombing and other acts of terrorism are prohibited by Islam.

Pointing out that terrorists commit acts of self and mass murder with the firm conviction that they will be rewarded by God and that they are heaven bound, Dr.Qadri’s fatwa convincingly advances scriptural evidence to demonstrate that the perpetrators of suicide bombings are destined for hell, not heaven.

According to the scholar, modern terrorists justify their indiscriminate killings by claiming that Islamic scripture allows such campaigns in war. However, he opened new ground by citing Islamic sources which prohibit killing of women, children, elders, religious leaders, business people, non-combatants and even service personnel not engaged in aggression.

“Contrary to the mindset of the perpetrators of the 11th of September 2001 attacks in New York or the 7th July 2005 tube bombs in London, damaging enemy property or avenging a wrong done by another is strictly prohibited by sound Islamic scholarship,” Dr. Qadri told the audience.

I hope my new hero Dr. Qadri has taken security precautions. There’s some debate over whether his fatwa is as “historic” as he claims, as well as how influential the fatwa will be, coming from a Sufi. But as one Western academic said,

Those who are already hardliners will pay no attention at all. But “swing voters”— poorly educated and angry Muslims, who respect mainstream scholars, will probably take note.

From his lips to Allah’s ears. The only hope for an enduring victory against radical Islam is for a different vision of Islam to take hold. (Hat tip: Glen, on Facebook)